A term you’ll hear a lot when talking about poker odds and expected value is “equity.”
Let’s take a closer 5️⃣ look at what that is.
WHAT IS EQUITY?
Equity is the percentage of
the pot that is “yours” based on the likelihood 5️⃣ of you winning the hand. The term is
often used interchangeably with the likelihood of winning, so if someone says 5️⃣ they have
20% equity in the pot, it means they have a 20% chance of winning the hand.
There are
three 5️⃣ possible ways of calculating equity: hand vs hand, hand vs range, and range vs
range. Working out equity for one 5️⃣ hand against another is easy, but we often don’t have
the luxury of knowing what our opponent has, so we 5️⃣ need to look at equity in terms of
hand vs range.
To do this, we compare our hand to all the 5️⃣ hands in our opponent’s range
to calculate our total equity. Followers of poker legend Phil Galfond may be familiar
with 5️⃣ this concept, as it’s the basis for his “GBucks” theory.
This theory advances the
concept of Sklansky dollars and applies it 5️⃣ to a range vs hand scenario. It’s quite
complicated, so I’ll do my best to cut it down to bullet 5️⃣ points.
Take the equity of
your hand against each part of your opponent’s range.
Multiply your equity by the
number of hand 5️⃣ combos in each part of your opponent’s range.
Add up the total of the
results from each section.
Divide by the number 5️⃣ of total hand combos in your opponent’s
range.
This will give you the average amount of equity your hand has against 5️⃣ your
opponent’s range.
Given how complicated this is at the table and the fact that most
casinos won’t provide you with 5️⃣ a pen and paper or wait the half an hour it would take
to work it out, most people don’t 5️⃣ use this at the tables. Instead, they use a rough
version where you try to work out equity against different 5️⃣ parts of their opponent’s
range and average them together. But, of course, even that takes time if you’re not
used 5️⃣ to it!
HOW TO CALCULATE YOUR EV
While we can use pot odds to work out whether or
not a call will 5️⃣ be profitable, we can’t use it to put an exact number on how profitable
or unprofitable it will be. If 5️⃣ we want to do this, we need to calculate the expected
value of a decision (EV), which is the average 5️⃣ result of our play if we were to repeat
it hundreds or thousands of times.
This is the equation for working 5️⃣ out your expected
value:
EV = (Win % *R$ Won) – (Lose % *R$ Lost)
Simply put, if the EV is a 5️⃣ positive
number, you’re making a profitable play, and if it’s a negative number, you’re making a
losing play.
For example, we 5️⃣ have a flush draw on the turn, and our opponent has
betR$10 into aR$50 pot. The pot odds calculation says 5️⃣ we need 16.66% equity to call,
and we know from the poker outs calculation that we will make our flush 5️⃣ 18% of the
time, but exactly how profitable is our play?
EV = (18% *R$60) – (82% *R$10)
EV =
($10.80) – 5️⃣ ($8.20) =R$2.60
We can see that the expected value of ourR$10 call on the
turn isR$2.60, and we confirm that our 5️⃣ call is profitable.
THE FOUR AND TWO RULE
